Russia to extend suspension of export duty on coal to Dec - source

MOSCOW. Aug 26 (Interfax) - Russian government agencies have agreed to extend the suspension of the export duty on coal for three months, until December 2024, a source familiar with the decision told Interfax.

Coal was exempted from the duty at the end of December 2023. The Finance Ministry then proposed to impose a flat surcharge of 380 rubles per tonne on the mineral extraction tax rates on coal in order to offset the lost budget revenues from the suspension of the export duty, Kommersant reported, citing industry sources.

The government later reinstated the export duty on coal as of March 1 and it was supposed to remain in place until February 28, 2025, but in May the duty on thermal coal and anthracite was again suspended for the period from May 1 to August 31.

The Russian government introduced the export duty linked to the ruble's exchange rate against the U.S. dollar on a broad range of goods, including coal, for the period from October 1, 2023 to the end of 2024. The duty is 4% at an exchange rate of 80-85 rubles/$1, 4.5% at a rate of 85-90 rubles/$1, 5.5% at 90-95 rubles/$1 and 7% when the exchange rates is over 95 rubles/$1.

Deputy Energy Minister Sergei Mochalnikov noted in mid-April that there was a small drop in Russian coal exports in the first quarter of 2024. "We have some constraints in logistics [on eastern railways] and today there are price rallies and it's unclear when they will end. Given that eastern railways are limited, we're forced to ship Russian coal products through ports in the Azov-Black Sea basin and ports in the Northwest," he said.

The Federal Statistics Service reported that the combined profits less losses of Russian coal companies tumbled 96.3% year-on-year to 9.1 billion rubles in the first five months of 2024, as their combined profits fell 69.6% to 81.1 billion rubles while losses surged 270% to 72 billion rubles. The share of profitable companies in the sector shrank to 49.1% in the five months from 66.7% a year earlier, while the share of lossmaking companies grew to 50.9% from 33.3%.